Correlation Between Gaztransport and Reckitt Benckiser
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Reckitt Benckiser at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gaztransport and Reckitt Benckiser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and Reckitt Benckiser Group, you can compare the effects of market volatilities on Gaztransport and Reckitt Benckiser and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gaztransport with a short position of Reckitt Benckiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Reckitt Benckiser.
Diversification Opportunities for Gaztransport and Reckitt Benckiser
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Reckitt is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Reckitt Benckiser Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reckitt Benckiser and Gaztransport is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gaztransport et Technigaz are associated (or correlated) with Reckitt Benckiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reckitt Benckiser has no effect on the direction of Gaztransport i.e., Gaztransport and Reckitt Benckiser go up and down completely randomly.
Pair Corralation between Gaztransport and Reckitt Benckiser
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 1.04 times more return on investment than Reckitt Benckiser. However, Gaztransport is 1.04 times more volatile than Reckitt Benckiser Group. It trades about 0.05 of its potential returns per unit of risk. Reckitt Benckiser Group is currently generating about 0.0 per unit of risk. If you would invest 9,844 in Gaztransport et Technigaz on September 4, 2024 and sell it today you would earn a total of 3,601 from holding Gaztransport et Technigaz or generate 36.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Reckitt Benckiser Group
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Reckitt Benckiser |
Gaztransport and Reckitt Benckiser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Reckitt Benckiser
The main advantage of trading using opposite Gaztransport and Reckitt Benckiser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Reckitt Benckiser can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Reckitt Benckiser will offset losses from the drop in Reckitt Benckiser's long position.| Gaztransport vs. Darden Restaurants | Gaztransport vs. Silvercorp Metals | Gaztransport vs. Neometals | Gaztransport vs. STMicroelectronics NV |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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